Sensex down by 430 points on bank scam

Nifty falls 110 points, investors lose Rs 4.30 L-cr in 5 sessions

Indian equities tumbled on Tuesday, with the benchmark Sensex plummeting by about 430 points to end at a nearly three-week low of 33,317 due to massive fag-end sell-offs in banking counters amid reports that the SFIO summoned other lenders in the PNB fraud matter.

This was the lowest closing for the BSE Sensex since December 14 when it had finished at 33,246.70 and also its biggest single-day fall since February 6, when it had lost 561.22.

As much as Rs 4.30 lakh crore of investors' money has been wiped out in the last five trading sessions, with Rs 1.54 lakh crore eroding on Monday.

Shares of banking majors led by State Bank of India, ICICI Bank, Bank of Baroda, Punjab National Bank, Kotak Bank, HDFC Bank, Axis Bank, Federal Bank and Yes Bank fell as much as 2.77 per cent.

Investor sentiment was dampened after reports that the Serious Fraud Investigation Office (SFIO) had approached other lenders that have exposure to the firms promoted by scam-tainted Nirav Modi and Mehul Choksi to help in the agency's probe into the over Rs 12,000-crore PNB scam.

Banking shares came under more selling pressure after the RBI on Monday said it had imposed a penalty of Rs 3 crore on Axis Bank for violation of NPA classification norms and Rs 2 crore on Indian Overseas Bank for not complying with the KYC regulations.

The benchmark BSE Sensex fell 1.27 per cent to 33,317.2, its lowest since Dec. 14, 2017, after rising 0.9 percent earlier in the session.

The broader NSE Nifty dropped 1.06 per cent to 10,249.25, its lowest close since Dec. 13, 2017, after rising 0.8 percent earlier.

In the last five sessions, the index has lost nearly 1,129 points.

The market capitalisation of BSE-listed companies fell to Rs 1,44,20,606 crore at the end of Tuesday’s trading session, from Rs 1,45,75,054.23 crore on Monday.

The market capitalisation of BSE-listed companies plummeted by Rs 4,30,042.5 crore to Rs 1,44,20,606 crore in five trading sessions.

"Market gave up gains despite positive trade in global market. Consolidation continues led by broad selling across all sector. Market has broken Monday’s low while banks continue to struggle due to NPA issue, higher bond yield and cost of funds. Investors are little nervous to start accumulating and are waiting for major triggers to get direction...," Vinod Nair, Head of Research, Geojit Financial Services, said.

Reacting to the development, Gitanjali Gems stock slumped nearly 5 per cent, to hit its fresh 52-week low of Rs 18.35 on the BSE.

This is the 14th straight session of fall for the stock. It has lost as as much as 75 per cent since February 14, the day the PNB fraud came to light.

Share of the Punjab National Bank also shed 2.30 per cent to close at 97.75 on the BSE.

Nifty Bank index turned negative down 1.49 per cent at 24,448.45 as Canara Bank, PNB, Bank of Baroda, SBI, ICICI Bank, Axis Bank, Kotak Bank, HDFC Bank, Federal Bank, IDFC Bank and Yes Bank were down up to 5.10 per cent after investigation deepened in the PNB fraud case.

Except consumer durables, all sectoral indices led by realty, banking, auto, capital goods and PSU, fell by up to 2.21 per cent.